Barclays fuelled anger over City pay yesterday by announcing job cuts of up to 12,000 this year while simultaneously bumping up its staff bonus pool to £2.4bn.

The group said around 7,000 jobs would go in the UK – including some branch-based roles – under plans to slash costs across the group.

Around half of the affected employees had already been told the bad news, it said.

Unions said the bonus news was ‘scandalous.’ Barclays shares fell 3.75 per cent in London.

‘Banks are still handing out multibillion-pound bonuses while Britons have suffered job losses, pay freezes and cuts to public services after the financial crisis,’ said TUC general secretary Frances O’Grady.

‘Barclays has stuck two fingers up to hard-pressed families across Britain.’

The size of the bonus pot was increased by 10 per cent on last year’s £2.2 billion haul, despite a 32 per cent drop in underlying annual profits to £5.2 billion.

The group’s profit figures were unusually announced a day early on Monday following a media leak.

The bumper payout will mean its 26,200 investment banking employees share out a £1.6 billion bonus pot for 2013, up 13 per cent on 2012, giving an average payout of £60,100 per employee in the division.

Barclays chief executive Antony Jenkins needs to pay to keep talent

Chief executive Antony Jenkins defended the increase in staff incentives, saying the group believes in ‘paying for performance and paying competitively’.

Mr Jenkins has refused to take his own 2013 bonus of up to £2.75m.

He also insisted the bank was in a better position than it had been in for years but admitted Barclays had more work to do in an overhaul which aims to reduce costs by £16.8 billion by 2015.

He said staff numbers would be badly hit by 10,000 to 12,000 job losses this year out of its 140,000-strong workforce.

This follows more than 7,600 jobs axed in 2013.

The latest cuts will affect employees across the bank, including customer-facing staff as well as senior managers, with 220 managing directors and 600 directors facing the axe.

Around 400 of those senior job cuts are from the investment bank. Barclays said 1,700 of the overall job losses have already been announced.

Mr Jenkins also confirmed it would close some of its 1,600 UK branches over time as more people bank online, but said there was no planned timescale.

The Institute of Directors (IoD) also criticised Barclays after results showed its bonus pool dwarfed the £859 million paid out in dividends to shareholders last year, despite increasing from £733 million in 2012.

Roger Barker, director of corporate governance at the IoD, said: ‘It cannot be right in any business for the executive bonus pool to be nearly three times bigger than the total dividend pay-out to the company’s owners.

“The question must be asked – for whom is this institution being run?’

Business Secretary Vince Cable also called on the banking sector to curb pay.

‘We need a responsible banking sector which rejects the bonus-fuelled culture of the past and puts the needs of consumers and businesses back at the heart of what they do,’ he said.